effect of performance appraisal on employee motivation at

EFFECT OF PERFORMANCE APPRAISAL ON EMPLOYEE

MOTIVATION AT MINISTRY OF EAST AFRICAN

COMMUNITY, LABOUR AND SOCIAL PROTECTION

CATHERINE WAMBUI MURIUKI

A RESEARCH PROJECT SUBMITTED IN PARTIAL

FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD

OF THE DEGREE OF MASTER OF BUSINESS

ADMINISTRATION, SCHOOL OF BUSINESS, UNIVERSITY OF

NAIROBI

2016

ii

DECLARATION

I declare that this research project is my original work and has not been presented for

any award of Degree in any other University.

Signature: ………………………….. Date: ………………………………..

CATHERINE WAMBUI MURIUKI

REG. NO: D61/80154/2012

This research project has been submitted for examination with approval by the

University Supervisor

Signature: …………………………… Date: ……………………………

DR. MERCY MUNJURI

LECTURER

DEPARTMENT OF BUSINESS ADMINISTRATION

SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI

iii

DEDICATION

This research work is dedicated to my dear husband, son and daughter who supported

me spiritually in the course of my education

iv

ACKNOWLEDGEMENT

First and foremost I would like to thank the Lord Almighty for bringing me this far in

my studies. I owe my gratitude to all those people who have made this research

project possible and because of whom my Masters Degree education experience has

been one that I will cherish forever.

My deepest gratitude is to my supervisor Dr. Mercy Munjuri and Prof. Peter

K’Obonyo for their assistant and guidance without which it could not have been

possible to write this research project. The development of this research project has

benefitted from the generous commitments of time, energy, ideas and positive

criticism from my immediate supervisor Dr. Mercy Munjuri whose support was

outstanding. Lastly, to my lecturers, fellow students, friends, and colleagues at

Ministry of Labour, East Africa Community and Social Protection for providing

friendly environment to study and work.

v

ABSTRACT The aim of the study was to establish the effect of performance appraisal on employee

motivation at the Ministry of East Africa Community, Labour and Social Protection.

The research study adopted a descriptive research design in form of a survey and a

sample size of one hundred and twenty (120) respondents drawn from all the

departments in the Ministry ranging from different job groups which included the

senior management (Job Group P and Above), middle level management (job group J

to N) and lower level employees (job group A to H). Stratified random sampling was

used as all the respondents were drawn from different levels or strata within the

Ministry. Structured questionnaires developed in form of a five point likert scale was

used for data collection as they were easy to administer and cheap in terms of cost and

time. Data was collected and analyzed by use of scientific package for social sciences

(SPSS). A regression model was used to determine the co-efficients of the effect of

performance appraisal on employee motivation. The study shows that there is a

strong positive significant correlation between performance appraisal and employee

motivation and it can concluded that performance appraisal system has a significant

impact on the employee motivation at the Ministry of Labour, East Africa Community

and Social Protection. The conclusion of the findings was that the Ministry uses

performance appraisal to motivate employees though there is need for a

comprehensive policy to link pay to performance. The recommends that effective

feedback and communication; giving training opportunities to employees to acquire

skills; and encouraging employees’ participation in performance appraisal processes

are all essential for effective performance appraisal process in an organization.

vi

TABLE OF CONTENTS

DECLARATION .................................................................................................................. ii

DEDICATION ..................................................................................................................... iii

ACKNOWLEDGEMENT .................................................................................................. iv

ABSTRACT .......................................................................................................................... v

LIST OF TABLES ............................................................................................................... ix

LIST OF FIGURES ............................................................................................................. x

CHAPTER ONE: INTRODUCTION ................................................................................ 1

1.1 Background of the Study ................................................................................................. 1

1.1.1 Performance Appraisal .............................................................................................. 2

1.1.2 Employee Motivation ................................................................................................ 5

1.1.3 Kenyan Civil Service ................................................................................................ 6

1.1.4 Ministry of East African Community, Labour and Social Protection ....................... 7

1.2 Research Problem ............................................................................................................ 8

1.3 Research Objective ........................................................................................................ 10

1.4 Value of the Study .......................................................................................................... 10

CHAPTER TWO: LITERATURE REVIEW ................................................................. 12

2.1 Introduction .................................................................................................................... 12

2.2 Theoretical Foundation .................................................................................................. 12

2.2.1 Goal Setting Theory ................................................................................................ 12

2.2.2 Expectancy Theory .................................................................................................. 13

2.3 Components of Effective Performance Appraisal System ............................................. 14

2.3.1 Performance Planning ............................................................................................. 14

2.3.2 Managing and Reviewing Performance .................................................................. 15

2.3.3 Performance Measurement ...................................................................................... 16

2.3.4 Performance Monitoring ......................................................................................... 17

2.3.5 Rewarding of Performance...................................................................................... 17

2.4 Factors Affecting Employee Motivation ........................................................................ 18

2.4.1 Organization Culture ............................................................................................... 18

2.4.2 Management and Leadership Style ......................................................................... 19

2.4.3 Learning and Development ..................................................................................... 19

2.4.4 Career Planning and Development .......................................................................... 20

2.4.5 Reward Systems ...................................................................................................... 20

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2.5 Performance Appraisal and Employee Motivation ........................................................ 21

CHAPTER THREE: RESEARCH METHODOLOGY ................................................ 23

3.1 Introduction .................................................................................................................... 23

3.2 Research Design............................................................................................................. 23

3.3 Target Population ........................................................................................................... 23

3.4 Sample Design ............................................................................................................... 24

3.5 Data Collection .............................................................................................................. 24

3.6 Data Analysis ................................................................................................................. 25

CHAPTER FOUR: DATA ANALYSIS, INTERPRETATION AND

PRESENTATION ............................................................................................................... 26

4.1 Introduction .................................................................................................................... 26

4.2 Response Rate ................................................................................................................ 26

4.3 Respondents Background Information Analysis ............................................................ 27

4.3.1 Respondents Genders .............................................................................................. 27

4.3.2 Respondents Age ..................................................................................................... 27

4.3.3 Highest Educational Qualification of the Respondent ........................................ 28

4.3.4 Work Experience of Respondents ....................................................................... 29

4.3.5 Job Category ........................................................................................................ 30

4.3.6 Department of Work ............................................................................................ 31

4.4 Performance Appraisal System .................................................................................. 32

4.4.1 Performance Planning .......................................................................................... 33

4.4.2: Performance Managing and Reviewing ............................................................. 34

4.4.3 Performance Monitoring ...................................................................................... 35

4.4.4 Performance Assessment ..................................................................................... 35

4.4.5 Rewarding of Performance .................................................................................. 36

4.5. Employee Motivation ................................................................................................ 37

4.6 Effect of Performance Appraisal on Employee Motivation ....................................... 38

4.6.1 Linear Regression Model ..................................................................................... 38

4.7 Discussions of the Findings ...................................................................................... 41

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS ...... 43

5.1 Introduction ................................................................................................................ 43

5.2 Summary of the Findings ........................................................................................... 43

5.4 Conclusion .................................................................................................................. 44

5.5 Recommendations ...................................................................................................... 44

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5.5.1 Effective Feedback and Communication on Performance Appraisal .................. 44

5.5.2 Training of Employees on Performance Appraisal ............................................. 45

5.3.3 Employees Participation on Performance Appraisal Process .............................. 45

5.6 Suggestion for Future Research ................................................................................. 46

5.7 Study Limitations ....................................................................................................... 46

REFERENCES ................................................................................................................... 47

APPENDICES .................................................................................................................... 50

APPENDIX I: QUESTIONNAIRE ................................................................................. 50

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LIST OF TABLES

Table 3.4.1: Sample Design ..............................................................................................24

Table 4.2: Response Rate ..................................................................................................26

Table 4.3.1: Respondents Gender ..................................................................................... 27

Table 4.3.3: Highest Educational Qualification of the Respondents ................................28

Table 4.3.4 Work Experience of Respondents .................................................................. 29

Table 4.3.5 Job Category ..................................................................................................30

Table 4.3.6: Department of Work ......................................................................................31

Table 4.4.1: Performance Planning ...................................................................................33

Table 4.4.2 Managing and Reviewing Performance .........................................................34

Table 4.4.3: Performance Monitoring ............................................................................... 35

Table 4.4.4: Performance Assessment .............................................................................. 36

Table 4.4.5: Rewarding Performance ................................................................................ 36

Table 4.5.1 Employee Motivation .....................................................................................37

Table 4.6.1: Linear Regression Analysis ...........................................................................38

Table 4.6.2 ANOVA ..........................................................................................................39

Table 4.6.3 Coefficients of Determination ........................................................................ 39

x

LIST OF FIGURES

Figure 4.3.3: Highest Educational Qualification of the Respondents ...............................29

Figure 4.3.4 Respondents Work Experience .....................................................................30

Figure 4.3.5 Job Category .................................................................................................31

Figure 4.3.6: Department of Work ....................................................................................32

1

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

Performance Appraisal System (PAS) is amongst the great paradoxes in effective

management of Human Resource (HR) in many organizations and its main purpose is

to improve efficiency and effectiveness in job performance. Performance appraisal as

a system has been in existence for a few decades. Formally, evaluation of employees

is believed to have been adopted in the eighteenth (18th) century and it involves

assessing performance in relationship to the laid down rules, procedures and

objectives of the job (Fletcher, 2004). According to Guest (2001) the outcomes of

effectual performance appraisal are improved accurateness of performance of an

employee and relating it to task performance and obvious likelihood of rewards.

Miller (2007) states that there are many outcomes that can be attained from having

performance appraisal program which include continuous open communication,

improved employee morale, job satisfaction, reduced employee turnover, increased

employee commitment, increased motivation for both individuals and teams, feeling

of equity among employees, and linkage between performance and rewards.

The research is grounded on two theories which include Goal Setting Theory by

Lotham and Locke (1979) and Expectancy Theory by Vroom (1964). Goal setting

theory by Latham and Locke (1979) states the importance of employees’ motivation

through setting of targets and is widely recognized as a technique to improve

performance. It emphasizes the need to agree and set targets which will act as

standard of performance measurement. Expectancy Theory by Vroom (1964)

advocates motivation as a function of personal effort to achieve high performance.

2

The performance level achieved will lead to a reward, and this provides the basic

feedback about ones strengths and weaknesses which is inevitable for formulating

succession plans. According to Expectancy Theory the perception of high

performance is achieved where certain reward equally proportional is expected.

The study was conducted in Kenya Civil Service because the functioning of the

Government depends upon how people work. Within the public sector, an

improvement in effectiveness and efficiency of civil service is central to the

government’s strategy of maintaining and improving national prosperity. Performance

appraisal methods including the use of targets, performance measures and personal

development are widely used within many areas of the public sector (Government of

Kenya, 2005). Economic Recovery Strategy (2003) published by Kenya Government

setting out a ten year transformational was to be measured by better results. The civil

service has embraced the promise of performance contracting and appraisal as a

means to improve performance, spur innovations such as balanced scored card.

1.1.1 Performance Appraisal

Performance appraisal is a performance measurement toolkit which is used to get

performance information of an individual and compares them with the already set

standards (Beardwell and Thompson, 2014). DeNisi (2000) indicates performance

appraisal as an organization’s system in which employees are given scores to show

their performance against their set targets to bring change in job performance.

Fletcher (2001) looks at performance appraisal largely as to mean those activities by

which employees are assessed in an organization in order to grow their competence,

raise their performance and give rewards. Aquinas (2008) states that performance

3

appraisal as a mechanism assesses the employees’ contribution in all levels of the

organization during a certain performance period of time and they are able to know

their performance strengths and weaknesses.

Performance appraisal also measures employees’ performance and growth on a

specific job and their prospective for future development (Gupta, 2008). Due to rapid

growth and changes in today’s organizations to suit the dynamic political, social and

economic environments in which they thrive, there is need for employees to align

their objectives with those of the organization (Dessler, 2003). Performance appraisal

is annual exercise conducted by organizations in order to determine an employee’s

overall contribution to the organization’s performance. This appraisal of performance

is done using aspects such as time management at work, quality of work done,

quantity produced and cost incurred to produce results or any other credible and

mutually agreed standard or measure (Invancevich, 2003). Mutsuddi (2012) shows

performance appraisal as a system that is structured and formal and is used to assess

the present performance of an employee and come up with ways in which they can

improve in future so that the employee as well as the organization can mutually

benefit. He also points out that performance appraisal assesses the performance of

employees and then give feedback about past performance, present performance and

future performance expectations. Performance appraisal answers many questions

concerning job; and by coming up with solutions and a path to be followed; poor

performances can sometimes be improved.

Prasad (2005) describes performance appraisal as the process of assessing the

performance of the employee on their job putting into consideration what the job

4

entails, and is based on the confluence of agreed objectives, knowledge, expertise and

competency, performance improvements and strategies for personal development of

performers. Performance appraisal contributes to the development of performance

culture in an organization by signifying the importance of high performance.

Mahapatro (2010) states that performance appraisal helps decision making concerning

retention in employment, job promotion, job transfer, payment of bonuses, and pay

rises, and enhance communication at all levels of employees. Yoder (2003) states that

performance appraisal as a communication tool shows skills, knowledge and attitude

needed for various jobs. Using appraisal the organization can know the attitudes and

behaviours that they want their employees to have at their different levels of work.

Rao (1985) opines that a properly designed performance appraisal system is critical as

it helps employees in understanding their strong and weak areas, regarding their roles

and responsibilities in the organization. Particularly, setting out personal goals

aligning them with organization objectives has been embraced in most of

organizations. According to Mullins (2010) performance appraisal is a process

applied in businesses to assess characters and contributions of employees in their

teams. He argues that appraisal of performance serves two purposes; evaluative

purpose and developmental purpose. Williams (1998) describes performance

appraisal as a systematic evaluation of the staff by their supervisor in terms of the job

performance as prescribed by the job description, specification and working

environment and it is usually carried against agreed criteria or conditions of

evaluation.

5

1.1.2 Employee Motivation

Motivation is a basic psychological process and it is a power that gives energy,

direction and upholds behaviour (Luthans, 2011). Motivation can be referred broadly

as individuals’ goals, ways of choosing their goals and individuals trying to change

their behaviour to suit those goals, and is concerns strength and direction of behaviour

and aspects influencing employees to act or behave in particular manner (Armstrong,

2012). He argues that there is motivation in employees when they anticipate that their

actions will lead to them attaining their goals and hence a valued reward to satisfy

needs and wants. High performance is achieved when employees are highly motivated

and have a personal choice to make unrestricted effort. Locke & Lotham (2004) refer

to factors within an employee that lead to acting in a certain way and to factors from

without that can entice one to act, as motivation. They point out that employee

behaviour is directly influenced by leadership and management of the organization as

it depends on how they will direct it towards given organizational goals.

According to Newstrom (2011) motivation is the result of a set of internal and

external forces that cause an employee to choose suitable course of action and hold on

certain behaviours. These behaviours will in turn be focused at achieving

organizational goals. Motivation also requires learning and understanding employee

drives and needs, since its origin is from within an individual. Chartered Management

Institute (2005) states that motivation is the formation of incentives, stimuli and

working environment that enable people to perform to the best of their ability. The

spirit of motivation is to provide employees with what they really desire most from

their job.

6

1.1.3 Kenyan Civil Service

The Kenyan Government introduced performance appraisal in the civil service as a

way of ensuring that service delivery improved. When it began way back around

2004, only a few number of State Corporations participated but now performance

appraisal is being put into practice in most of the Ministries, Departments and

Agencies (MDAs). The benefits of performance appraisal encouraged the decision for

it to cover all MDAs due to improved administrative decisions, financial performance

and improved service delivery. To ensure its success, Ministries had to work towards

set targets, come up with service charters and compare their performances with other

best performances worldwide. The results of the efforts were considerable that

Ministries won international recognition in several African countries that were willing

to learn from the practice in Kenyan Government (GoK, 2010).

In Kenya, performance appraisal is freely negotiated between the supervisor and the

employee as is the case of performance contacting where the government and

different ministries freely negotiate on the targets to be achieved. Performance

appraisal process is started after performance contracting is done where agreements

between Government and different ministries, departments and agencies specify the

objectives, obligations and responsibilities of the two parties involved. The contract

stipulates the expected results to be attained by the contracted party and the

commitment of the Government as the contracting party. In this case the Government

owns and manages the contracted party. All this is done to enable the Government to

gain and be able to deliver its mandate to the citizens. Performance contacting is also

used to organize and define tasks to be performed by management and also ensuring

that they are achievable. It also helps in coming up with what is to be done and how to

7

do it. The outcomes that are expected after introduction of the performance

contracting include improvement of services delivered; enhanced effectiveness and

efficiency; and uptake of a performance oriented culture in the civil service; measured

performance; and connecting performance, sanctions and rewards (GoK, 2012).

1.1.4 Ministry of East African Community, Labour and Social Protection

Ministry of East African Community, Labour and Social Protection was formed due

to restructuring in Government in May, 2013. The Ministry was as a result of

combination of departments from former Labour and Departments of Children’s

Services and that of Social Development from Ministry of Gender, Children and

Social Development. The Executive order No. 2 of 2013 put following departments in

the Ministry; Labour, Trade Unions, National Employment Bureau (NEB), Children’s

Services, Social Development, Productivity Centre of Kenya (PCK), Directorate of

Occupational Safety and Health Services (DOSHS), and National Human Resource

Planning and Development(NHRP&D). Besides are Semi-Autonomous Government

Agencies (SAGAs) that is, National Industrial Training Authority (NITA), National

Council for Persons with Disability (NCPWD) and National Council for Children’s

Services (NCC). National Social Security Fund (NSSF) is the only mandated

Autonomous Government Agency (AGA) of the Ministry. There is also Social

Protection Secretariat.

The Ministry is mandated to formulate, review and implementation policies on social

security of children, old persons and those with disabilities. Others are employment

policies, national human resource planning and development policies, national labour

productivity policies, child labour policies and, internship and volunteers for public

8

service, community development, protection and advocacy of needs of persons with

disabilities, social Assistance programmes, workplace inspection and workman's

compensation (www.labour.go.ke, 2016)

1.2 Research Problem

For an employee to have motivation to perform, to develop personal capabilities, and

improve their future performance this is influenced by continuous feedback on their

performance (Invancevich, 2008). People are motivated when they expect a certain

course of action will likely lead to attainment of a goal and thus a valued reward – one

that satisfies their needs and wants (Armstrong, 2009). Only when employees are

motivated towards appropriate goals that there is likelihood or organizational success

is enhanced. Since productivity is influenced by employee motivation level,

organizations and particularly their line managers have to realize what inspires

employees to reach the highest level of their performance (Beardwell and Claydon,

2007). Organizations with best systems of performance appraisal usually show higher

growth, higher return per employee, less attrition rate and stable platform for new

challenges (Debemitra, 2008). Aquinis and Kraiger (2009) argue that implementation

of a well-designed performance appraisal system can strength an organization in

several ways such as employee retention, commitment, increase in employee self

efficacy and competitiveness hence increased satisfaction (in areas of recognition and

experiencing growth).

Performance appraisal acts an important factor of the function of overall human

resource management in the State Corporations, ministries and County Governments.

On the whole performance appraisal process is supposed to manage and improve

9

performance of the Civil Service and County Governments by enabling participation

of staff where you involve them in planning, delivery and assessment of job

performance (Government of Kenya, 2007). The Government through public service

commission has set performance appraisal guidelines as part of performance

contracting and results based management. The Kenyan government acknowledges

that for many years there has been poor performance in the civil service. (GOK,2008).

The civil service is faced with the challenge of poor and deteriorating performance,

which acts as a stumbling block to realization of sustainable economic growth. The

civil service has consistently performed below expectations due to: poor management

and leadership; funds and human resource mismanagement; excess staff; work

duplication; poor staff performance; government bureaucracy and excess political

interference. This leads to weak economies, poor services; poor and weak

infrastructures amongst other economic problems like brain drain (GOK, 2007).

Several studies have been done in relation to the effect of performance appraisal on

employee motivation. Chaponda (2014) conducted a case study on the effect of

performance appraisal on employee motivation in Slum based Non-governmental

Organization situated in Nairobi. The study established that performance appraisal is

important in employee motivation and has helped improve job performance since it

identifies performance appraisal problems and how to improve employee productivity

and motivation. Njeru (2013) conducted a descriptive research study on the role of

performance appraisal on performance of job in the public sector at Kirinyaga Central

District. The study established that majority of civil servants set goals and attains

them while a few received feedback on their performance. Kamiti (2014) did a

descriptive study on the effect of performance appraisal on civil servants at

10

Directorate of Tourism. The study revealed that performance appraisal acts as

important factor that contributes to the employees’ motivation. The more transparent

and objective performance appraisal is in the government offices, the higher would be

the motivation of employees.

Many of these studies that have been done on the effect of performance appraisal on

employee motivation within civil service have failed to explain how performance

appraisal affects employee motivation in the civil service. This study therefore aims at

bridging the existing knowledge gaps by endeavouring to provide an answer to the

question; what is the effect of performance appraisal on employee motivation at the

Ministry of East African Community, Labour and Social Protection?

1.3 Research Objective

To establish the effect of performance appraisal on employee motivation at Ministry

of East African Community, Labour and Social Protection.

1.4 Value of the Study

Scholars and Academicians will find the research useful because it will contribute to

knowledge and also identify the gap that the study might have left and stimulate

further research on performance appraisal and employee motivation. The study will

also help future academic researchers’ who are aspiring to conduct a performance

appraisal study in government through using the findings and recommendation as a

reference in adding value to the field of human resource management.

11

Policy makers and practitioners will benefit from the study as it will help them in

generating new performance guidelines and also in successful implementation of

performance appraisal. State corporations will find the study useful since it will

provide an insight to challenges faced by employees in analyzing their goals and

organizational policies related to performance management. The management of

different Government Ministries, Departments and County Governments will benefit

from the study since it will help them make informed decisions with regard to

performance appraisal and how to motivate employees who perform better.

The study will also benefit human resource practice in the sense that the findings will

improve the knowledge on the construct. The human resource practitioners will also

use the findings for development of employees’ capacity to meet and surpass expected

performance and to achieve their full potential for their benefit and the organizations

they work for.

12

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

The chapter highlights and discusses the theories underpinning the study. It also

discusses components of effective performance appraisal system and factors affecting

employee motivation. In addition it evaluates what scholars and researchers have

written about effects of performance appraisal on employee motivation in

organization.

2.2 Theoretical Foundation

The study was supported by Goal Setting Theory (Lotham and Locke, 1979) and

Expectancy Theory (Vroom, 1964).

2.2.1 Goal Setting Theory

The theory was advanced by Lotham and Locke (1979) when they argued that goals

set for employees can motivate them and thus improve their performance. Employees

link target to organization goals where they assess themselves and change their

behaviour to attain those targets. When goals are specific, performance and

motivation go up. This also happens when challenging but achievable goals are set

and feedback is given on their performance. They also point out that employees

should also participate in goal setting so as to own them. Feedback is also important

as it motivates the employees to achieve high goals. Pintrich (2004) indicates that

employees set different goals in different work situations and we cannot always

assume that goals are always reachable. Locke and Lotham (2002) argue that setting

challenging and specific goals does not assure employees of performance but the

13

achievement of those goals has to be motivating. They agree that commitment on

goals is likely to be high when goals are made open and they are not imposed on

individuals.

Drummond (2000) argues that the core of the theory is having targeted action where

employees opt for objectives that allow them meet their aspirations or needs. Mitchell

(1997) opines that challenging goals motivate more than easier ones; moreover,

specific goals are more motivating than general goals. Newstrom (2011) believes that

setting of goals motivates because there is a deficit to be met between the current and

future performance. This creates tension and the employee reduces it by attaining the

goals. This in turn raises employees drive, gives competence in work and raises self

esteem which further stimulates the need for personal development. Luthans (2011)

points out those goals give direction to the behaviour of employees and gear their

efforts to particular outcomes.

2.2.2 Expectancy Theory

The theory is also referred to expectancy valence theory. Expectancy Theory was

brought forth by Vroom (1964) and its idea is that people’s expectations in their

performance affect their behaviour and the reward they seek. It argues that motivation

comes about through expected performance outcome and the attached level of value

to the outcome by the individual. According to Vroom organizational behaviour

assessment is important. He argues that motivation of people depends on their

expectations in terms of probability that effort leads to performance, instrumentality

or assumed connection between performance and rewards, and valence which is the

assumed value attached to the reward.

14

Vroom (1964) also believes that if people accept as true a certain worth of a goal and

that they will achieve it through their actions; they will be motivated to achieve it.

Vroom’s theory asserts that people’s motivation towards doing anything is as a result

of the individual putting a certain value on the goal and the probability of achieving

that goal. The theory also helps managers to understand the relationship between

motivation, performance and pay. Vroom points out that motivation depends on the

anticipation that effort will bring about performance.

2.3 Components of Effective Performance Appraisal System

Performance appraisal serves as a strategy focusing on the employees choosing

behaviours required to attain goals of the organization with success. An appraisal

system helps to make decisions on needed areas of employee development, and assess

human resource policies and programmes. The aims of relating compensation with

performance and other human resource choices is to enable staff have better

performance (Fisher, Schvenfeldt and Shaw, 2009). Williams (2002) feels that

performance appraisal is basically concerned with creating an environment whereby

employees share organization’s goals and then helping the them understand their

contribution to the goals. According to Kohli and Deb (2010) an effective

performance appraisal system has five components which include performance

planning, managing of performance, performance review /assessment, performance

monitoring and rewarding of performance.

2.3.1 Performance Planning

This forms the first step of successful performance appraisal and it involves coming

up with standards of performance in line with organization strategic objectives and

15

noting competencies required and development strategies to perform successfully

(Kohli and Deb, 2010). Kandula (2007) states that performance planning is a

managerial process that ensures that the employee delivers output persistently over a

period of time as per the requirements of the organization. It is essential to involve

employees in the planning process for them to understand the objectives and strategy

of the organization.

It is used in managing performance where it entails the manager and the employee

agreeing on the targets in order to meet the laid objectives, raise performance,

competence and performance standards and capacities for their work (Armstrong,

2014).

2.3.2 Managing and Reviewing Performance

Performance managing and review is an essential work that managers do on a given

performance period and that it forms a cycle that shows good and normal

management practices of directing, checking and performance measurement and

taking necessary action (Armstrong 2014). Performance managing provides the skills

to transform performance appraisal into an on-going dialogue and development with

benefits for the individual employee, teams, managers and organizations. Managing

of performance is the procedure of working in the direction of achieving the

performance expectations made during performance planning (Kandula, 2007). Real

performance is re-evaluated after a specific period to assess whether the objectives are

being achieved. In case of underperformance, managers need to guide the employee

on ways to correct the inadequacy and continuously monitor the improvement efforts

and improvements achieved (Kohli and Deb, 2010).

16

Torrington et.al (2013) believe that top management must support and encourage

performance management and review culture where they make it clear that it is very

important in achieving continued success in the organization. In addition, Armstrong

and Baron (2004), show that performance management ensures that management

knows the result of their work related actions to their employees. The set standards

are compared with the real performance in order to measure the outcome and

correction measures are developed referring to the original organization goals. The

results will act as a source of feedback to the staff. This also assists in coming up with

communication strategies at all levels of employment to attain common objectives of

the organization (Marion, 1998).

2.3.3 Performance Measurement

Performance measurement is essential part of performance appraisal. It acts as the

basis to provide and generate feedback and identifying where there is success to

reinforce it, and where there is poor performance for corrective actions (Armstrong,

2014). Measurement of performance is any procedure that involves setting work

standards, assessing the employee’s actual performance in relation to these standards

and providing feedback to the employee with the aim of motivating them to eliminate

performance deficiencies or to continue to perform above these standards (Dessler,

2002). Employee’s motivation in their performance, personal skills development and

improving future performance is influenced by the previous performance feedbacks

(Kohli and Deb, 2007). According to Kandula (2007) performance assessment gives a

rationale for various human resource decisions such as career planning, rewarding,

training counselling, transferring, termination and mentoring.

17

Armstrong (2014) also argues that measuring performance is relatively easy for the

responsibility of achieving targets in terms of quantities, like sales; which more

difficult for knowledge workers like scientists. But the difficulty would be eased if

differentiating of results is made between outcomes and outputs. One can measure

output in terms of quantities, while an outcome as a result is an effect that can be seen

and felt but essentially it cannot be quantified.

2.3.4 Performance Monitoring

Monitoring of performance is the process of making accurate and objective

performance observations on the basis of outcomes and expectations which are in an

employee’s performance plan and are duly reflected in the performance appraisal with

the aim of developing the performance of employee (Kandula, 2007). Many

performance appraisal schemes include monitoring, which is done after reviewing

performance to indicate its quality. A scale which represents the manager’s opinion is

used to show how well the employee performs. Both manager and employee monitor

performance and give feedback which is analysed and additional corrective measures

are given (Armstrong,2014).

2.3.5 Rewarding of Performance

A reward can be financial or non-financial elements directed at facilitating employees

who add value in competitive edge. Employees reward can occur for performing roles

where they exhibit certain values and behaviour and ensuring they pursue

management objectives (CIPD, 2009). This occurs when finishing the period of

performance in question where assessment of accomplished targets and the skills the

employees have acquired; and giving feedback through discussion on the assessment

18

done on the employees (McAfee and Chanmpagne, 1993). The whole process is

evaluated and establishes whether it has contributed to the overall performance of the

organization.

A successful human resource performance appraisal system is essential in providing

the needed information in making decisions regarding administration. The system

helps the employees to be motivated thus utilizing their full potential in achieving the

goals of the organization (Musgrove & Creighton, 1973).

2.4 Factors Affecting Employee Motivation

The desire within a person causing them to act is called motivation. We need to

understand motivation is important because many human resource concerns like

compensation and performance are affected by, and influence motivation (Mathis and

Jackson, 2005). Motivating employees brings goal oriented behaviour. Lawler (1994)

shows that performance appraisal impacts strongly on the motivation of employees.

Motivated employees influence organization policies, and in turn affect organization

performance. Employees persue performance objectives set by those in managerial

levels. Armstrong (2014) believes that the factors that can affect motivation in an

organization include organization culture, learning and development, career planning

and development, reward systems, work environment and, management and

leadership styles

2.4.1 Organization Culture

Organization culture refers to beliefs, traditions, policies, values or attitudes that

influence what people do and think in organizations (Mullins, 2010). Culture is a most

19

powerful and intangible ingredient of performance. Strong and positive culture is

important for good performance and it brings about positive work environment where

every employee becomes comfortable to work in. A strong positive culture can

improve performance magnificently, whiles a negative culture usually lowers

employee motivation which leads to low performance (Kandula, 2007).

2.4.2 Management and Leadership Style

Leadership influences and supports other employees to work enthusiastically towards

achieving objectives. It helps individuals come up with goals, and motivates them to

achieve the identified goals (Newstrom, 2011). Every leader has a role to influence

others to willingly seek out for defined objectives. Managers direct whereas leaders

create and inspire others to achieve and go beyond their normal capabilities

(Greenburg, 2011). Robbins and Judge (2013) state that good management brings

about consistency and order by planning, coming up with organization structures, and

monitoring performance with respect to those plans.

2.4.3 Learning and Development

According to Armstrong (2014) learning and development ensures that organization

has staff with the knowledge and skills and are engaged as required. He also opines

that organizations need people who have high levels of knowledge, skills and

competencies and their need to consider personal needs of their employees for

development and growth. Fletcher (2004) argues that for an organization to achieve

its desired objectives learning and development must be tied to its strategies.

Reynolds (2004) concur that firm’s that train managers and staff get better results and

improve performance.

20

2.4.4 Career Planning and Development

This is a great source of motivation as ones skills are matched with the needs of the

organization. It is a vital instrument for organizations since it enables them attain

organizational objectives (Armstrong, 2014). Career planning and development is a

great opportunity since a good and systematic career management can motivate

employees and enhance their performance (Kandula, 2007). In performance appraisal,

careers are used as avenues to gratify self-esteem and self-actualization needs of

employees, and it has a prominent role in the grand strategy of performance

management (Kandula, 2007).

2.4.5 Reward Systems

Reward systems recognize the value employees add to an organization resulting to

rewarding them. Reward system in addition to financial rewards, also deals with non-

financial reward which may include development opportunities, added and higher

level job tasks and recognition (Armstrong, 2014). He also argues that the reward

system is driven by strategy employed in business which on the other hand drives the

reward strategy. Employees who perform well in organizations tend to receive

rewards. The reward system is used in performance management to help in improving

performance through different rewards such as recognition and training.

Reward is useful for a successful performance of employees as poor reward systems

may lead to collapsing of other strategies used in managing performance irrespective

of how professional the strategies are and how well they are implemented. Employees

and organization can perform at their level best due to raised employee motivation;

and this in turn leads to higher rewards (Kandula, 2007).

21

2.5 Performance Appraisal and Employee Motivation

In most organizations the performance of individual employees determines success of

that organization. Performance appraisal and motivation are important for

organizations to make the most out of the effectiveness of individual employees.

Performance of each employee is affected by a number of factors such as their

capability, the support they receive from the organization and expanded efforts. For

competitive organizational and individual performance, human resource management

activities should be developed, evaluated and changed when necessary (Mathis and

Jackson, 2005).

Many empirical studies have revealed that an effective performance appraisal as part

of the human resource management makes a difference to achieve goals of the

organization. A study by Higher Performance Work Practices (HPWP, 2004) based

on a case study of ten (10) organizations and a survey of two hundred and ninety four

(294) companies in United Kingdom identified specific higher performance work

practices being employed in a number of public sector organizations. The study

concluded that performance appraisal creates a chance for correcting

underperformance and also motivating the workforce. Muriu (2014) conducted

research on the factors affecting implementation of performance contracting process

in Kenya’s civil service. The study revealed that employee motivation is to a high

extent, a major factor that contributes to performance in the civil service. Performance

appraisal and motivation were found to be having higher influences on organizational

culture and organization effectiveness.

22

A workplace employment relations survey conducted by Zhang (2012) on the impact

of performance appraisal on employee performance shows that performance appraisal

has a positive and insignificant relationship with employee performance. The study

also tested other variables and established a strong and positive correlation between

performance appraisal and employee motivation and reward. Njeru (2013) conducted

a descriptive survey on the role of performance appraisal system on job performance

in the public sector. The study found out that training and feedback on performance

are critical in performance appraisal. Karimi’s (2013) study on the role of appraisal

system on job performance in the public sector found out that appraisal is an

expensive investment both in time and effort. The study recommends that the

Government of Kenya should ensure that civil servants must be motivated in order to

enhance their performance.

Kamiti (2014) in his research on the effect of performance appraisal on motivation of

civil servants revealed that performance appraisal is an important factor which

touches on the employees’ motivation. The study recommended that promotions and

trainings motivate employees in the civil service apart from monetary rewards. To

summarize, most of these empirical studies have revealed existence of a relationship

between appraisal of performance and employee motivation. In addition it is

important that organizations link performance to rewards and to sanctions. As a result

the employees’ behaviour will be facilitated through motivation in order to increase

productivity and improve performance in the organization.

23

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction

The chapter discusses research design used, the tools used for collecting data, its

analysis and presentation.

3.2 Research Design

A descriptive research design was adopted in form of a survey. Mugenda and

Mugenda (1999) tell us that descriptive survey entails a science which observes and

describes the behaviour of a subject without interfering with it at all. It seeks to find

out who, how, what, where and when about something in particular. It is a method

employed in collecting data from targeted population respondents by use of

questionnaires, interviews and observation schedule. Descriptive research design

describes characteristics of a particular population in a systematic and accurate

approach. Mugenda and Mugenda (2003) say that descriptive survey design aids the

researcher in gathering, summarizing, presenting and interpreting information for

clarification purposes.

3.3 Target Population

Cooper and Schindler (2003) indicate that a population is a group on which the

researcher will focus. Ngechu (2004) states that a population is a set of people,

services, elements, group of things, or households that are being investigated. Target

population in the study was employees working with the Ministry. According to

Public Service Commission (2015) there was one thousand two hundred (1200)

24

employees working as Civil Servants in the Ministry of East African Community,

Labour and Social Protection (MEACL&SP Staff Establishment, 2016).

3.4 Sample Design

Stratified random sampling technique was applied to determine the sample of the

population. Cooper and Schindler (2003) define stratified random sampling as a

process by which the sample is restricted to include elements from each of the

segments and it is important when the researcher wants to get the features of

subgroups of a particular population. It also involves dividing the population and then

taking random sample from each group. The method classified the population into

strata and ensured all departments, sections and units were represented. The sample

design of the study was ten per cent (10%) of the target population which was

stratified into Senior Management in Job Group P to U, Middle level in Job Group J

to N, and Lower Level Civil Servants in Job Group A to H.

Table 3.4.1: Sample Design

Population Category Population Sample (10% of

population)

Senior Management (Job Groups P to

U)

200 20

Middle Level Management (Job

Groups J to N)

300 30

Lower Level Civil Servants (Job

Groups A to H)

700 70

Total 1200 120

3.5 Data Collection

Primary source of data was used and data was collected using structured

questionnaires. The questionnaires adopted Five Point Likert Scale to establish effect

of performance appraisal on motivating employees in the Civil Service. The

25

questionnaires were divided into three parts. Section ‘A” was about background

information of the respondents while Section ‘B’ had questions related to

performance appraisal. Section ‘C’ was having questions on employee motivation.

Administering of questionnaires was done through drop and pick method.

3.6 Data Analysis

Data was checked for accuracy, uniformity, logical completeness consistency before

analysis. General information of the respondents was analysed by using descriptive

statistics such as percentages and frequency. Regression analysis was used to establish

the effect of performance appraisal on employee motivation in the Ministry of East

African Community (EAC), Labour and Social Protection. Findings have been

presented using tables, pie charts and graphs.

Linear Regression Model

Y= β0+ βX +ε

Y = Employee Motivation

β0 = Constant

β1 = Regression of Coeffient

X = Performance Appraisal

ε = Error

26

CHAPTER FOUR: DATA ANALYSIS, INTERPRETATION AND

PRESENTATION

4.1 Introduction

Findings of the study are provided in this chapter. It also highlights the four sections

which are Response rate, background information of the respondents, performance

appraisal, employee motivation and discussions of the findings. The results are

presented in form of graphs, figures and tables

4.2 Response Rate

Table 4.2: Response Rate

Response Rate Frequency Percentage (%)

Received questionnaires 97 81%

Unretruned questionnaires 23 19%

Total 120 100%

Source (Research Data)

The researcher administered one hundred and twenty (120) questionnaires to the

respondents and out of the one twenty (120) questionnaires distributed, ninety seven

(97) questionnaires were filled and received back representing eighty one percent

(81%) while (23) questionnaires were never received back from the respondents

representing nineteen (19%). The response rate was in order since Mugenda and

Mugenda (1999) stipulates that a response rate of 50% is adequate for analysis and

reporting, a rate of 60% is good and a rate of 70% and over is excellent. Results

summarised in Table 4.2.1 and Figure 4.2.1 on the response rate shows that 81 %

were returned while 19% were not received back. The results imply that the response

was acceptable and fair as pointed out by Mugenda and Mugenda (1999).

27

4.3 Respondents Background Information Analysis

The part of the questionnaire presents the data findings on the respondents’

background information. The background information includes gender of respondents,

age of the respondents, highest educational level, Work of experience of the

respondents, job category and department of work of the respondents in the

organization.

4.3.1 Respondents Genders

Respondents were to state their gender and findings are as shown below in table 4.3.1.

Table 4.3.1: Respondents Gender

Gender Frequency Percentage (%)

Female 62 64%

Male 35 36%

Total 97 100%


Based on the shown findings above on the respondents gender it is evident that 64%

of the respondents were female while 36% were male. The findings imply that both

male and female participated in the study.

4.3.2 Respondents Age

Respondents Age Bracket

(Years)

Frequency Percentage

18 to 25 6 7%

26 to 35 23 24%

36 to 45 26 27%

46 and Above 42 42%

Total 97 100%


28

The responses on age are shown in the table 4.3.2. The study findings indicate that 7%

of the respondents were 18-25 years, 24% fall between 26-35 years, 27% were of

bewtween 36-45 years, while 42% of the respondents were 46 and above years.This

indicates that majority of respondents were 46 and above years. This implies that the

organization should start a succession planning programme to bridge the gap between

the aging employees and young middle aged employees.

4.3.3 Highest Educational Qualification of the Respondent

The respondents were asked to state their highest education qualifications. Results are

captured in Table 4.3.3 and Figure 4.3.3 below

Table 4.3.3: Highest Educational Qualification of the Respondents

Highest Education Qualification Frequency Percentage

PHD 0 0%

Masters Degree 13 12%

Bachelors Degree 21 22%

Higher Diploma 18 19%

Diploma 21 22%

Certificate 24 25%

Total 97 100%


29

Figure 4.3.3: Highest Educational Qualification of the Respondents


The outcome on respondents highest education quailification shows that 12% of the

respondents had Masters Degree, 19% respondents had Higher Diploma, 22%

respondents had Bachelors Degree, 22% also had Diploma while 25% were ordinary

certificate holders. This shows that that majority of the employees had at least

certificate qualifications.The findings imply that most of the employees were well

informed on performance appraisal system and employee motivation.

4.3.4 Work Experience of Respondents

Table 4.3.4 Work Experience of Respondents

Work Experince Frequency Percentage

0 to 10 years 40 41%

10 to 20 years 11 47%

20 years and Above 46 12%

Total 97 100%


30

Figure 4.3.4 Respondents Work Experience


The item was required to capture the respondent years of work duration with the

Ministry. Findings are presented Figure 4.3.4 above. From the findings as per Figure

4.3.4 majority of the respondents have worked in the Ministry between 10 to 20 years

at 47%, 41% of the them had worked for 0 to 10 years while 12% had worked for

over 20 years hence had participated in performance appraisal process for a long

period.

4.3.5 Job Category

Table 4.3.5 Job Category

Job Category Frequency Percentage

Senior Management (P and Above) 20 21%

Middle (J to N) 30 31%

Lower Level 47 48%

Total 97 100%


31

Figure 4.3.5 Job Category


Results are in Table 4.3.5 and Figure 4.3.5 above on job category of the respondents,

the results show that 12% were from Senior management (Job Group P and above),

31% were middle level civil servants in job group J to N while Lower were 48% in

job group A to H. The findings show that many respondents were lower level civil

servants and this indicates that the study was representative and inclusive to all

categories of employees in the ministry.

4.3.6 Department of Work

Table 4.3.6: Department of Work

Department of Work Frequency Percentage

Department of Labour 63 65%

Department of Social Protection 24 25%

National Employment Bureau 5 5%

Productivity Centre of Kenya 0 0%

Directrorate of Human Resource Planning and

Development

5 5%

Total 97 100%


32

Figure 4.3.6: Department of Work


The findings above on the respondents department of work show that most

respondents were from Department of Labour at 63%, Department of social protection

were 24%, National Employment Bureau were 5%, similar to that of National Human

Resource Planning and Development. These results imply that all the departments

were represented and majorities were from Department of Labour.

4.4 Performance Appraisal System

The study focused on the research findings of various performance appraisal practices

on employee motivation at the Ministry. The section shows standard deviations and

means of performance planning, managing and reviewing of performance,

monitoring, performance assessment, and performance rewarding. The employee

motivation had several factors that included; organization culture, management and

leadership style, learning and development, career planning and development and

reward systems. The study investigated the effect of the foresaid factors on employee

motivation.

33

The study used a five-point Likert scale ranging from Strongly Agree (5) to Strongly

Disagree (1). The strongly disagree and disagree scores represented a variable of

mean scores ranging from 0 to 2.5 on the continuous Likert scale; (0≤ L.E <2.4). The

scores on moderate represented a variable with a mean score of 2.5 to 3.4 on Likert

scale: (2.5≤M.E. <3.4). Both agree and strongly Agree scores represented a variable

of mean score of 3.5 to 5.0 on Likert scale; (3.5≤ G.E. <5.0)

4.4.1 Performance Planning

In respect to this aspect, the respondents indicated the extent to which they agreed

with the statements under performance planning where table 4.1 represents the results.

Table 4.4.1: Performance Planning

Mean Std.

Deviation

My organization set clear objectives and I work towards their

achievement 3.9485 1.06430

My performance expectations are usually defined in my individual

work plan and job description 3.9485 1.16700

I adhere to realistic work plans and time tables established by my

supervisor, department and organization 3.8041 1.17827

I improve the quality of work through better planning, on-going

discussions and fair participatory appraisal 3.7216 1.14330

The ministry involves employees in planning for performance 3.6495 1.19060

Average Mean 3.8144


Study findings indicate that all the respondents agreed to a great extent with all the

aspects tested under performance planning. My organization set clear objectives and I

work towards their achievement (3.9485), My performance expectations are usually

defined in my individual work plan and job description (3.9485), I adhere to realistic

work plans and time tables established by my supervisor, department and organization

(3.8041), I improve the quality of work through better planning, on-going discussions

and fair participatory appraisal (3.7216), and the ministry involves employees in

34

planning for performance (3.6495). Therefore, we can deduce that the organization

exercised performance planning within the ministry an aspect that can be investigated

further on employee motivation.

4.4.2: Performance Managing and Reviewing

Concerning the aspect, the respondents indicated the extent to which they agreed with

the statements under managing and reviewing of performance. Table 4.2 represents

the results.

Table 4.4.2 Managing and Reviewing Performance

Mean Std.

Deviation

My supervisor holds a performance review meeting to discuss my

performance 4.0000 .87797

I am provided with feedback based on factual evidence on my

performance 3.8763 .76727

My performance is balanced between achievements in relation to

objectives 3.6186 1.12216

My behaviour in the job affects my performance 3.4021 1.18726

Average Mean 3.7243


Findings revealed that majority of the respondents and to a great extent agreed that;

My supervisor holds a performance review meeting to discuss my performance

(4.0000), I am provided with feedback based on factual evidence on my performance

(3.8763), and my performance is balanced between achievements and objectives

(3.6186). Moreover, to a moderate extent respondents agreed that my behaviour in the

job affects my performance (3.4021). Therefore, it can be concluded that the

organization was aware of managing and reviewing performance.

35

4.4.3 Performance Monitoring

The respondents were to indicate extent to which they agreed with the statements in

performance monitoring where table 4.4.3 represents the findings.

Table 4.4.3: Performance Monitoring

Mean Std.

Deviation

There is feedback on my performance as an employee 5.0000 .00000

My work environment is friendly and helps me work effectively 4.8351 .62384

I have the right tools to help me achieve my work goals 4.8041 .63965

My work plan is reviewed during monitoring process 4.7938 .72079

Progress reviews are conducted to compare the predetermined

standards of employees 4.1134 .86454

My individual performance has link with organizational performance 3.6289 .76811

Average Mean 4.5292


Study findings reveal that all the respondents agreed to great extent with all the

aspects that were featured under performance monitoring. There is feedback on my

performance as an employee (5.0000), my work environment is friendly and helps me

work effectively (4.8351), I have the right tools to help me achieve my work goals

(4.8041), my work plan is reviewed during monitoring process (4.7938), progress

reviews are conducted to compare the predetermined standards of employees

(4.1134), and my individual performance has link with organizational performance

(3.6289). Therefore, it can be deduced that performance monitoring was being utilized

in the organization.

4.4.4 Performance Assessment

The study sought to what extent the respondents agreed with the listed aspects. Table

4.4.4 gives the results.

36

Table 4.4.4: Performance Assessment

Mean Std.

Deviation

My supervisors continuously assess my work progress 4.7526 .67748

My performance is evaluated quarterly, semi-annually and annually

based on performance indicators 3.8866 1.04957

There is discussion between my supervisor and myself during

performance assessment 3.7423 .97124

Performance is rated 3.2680 1.15934

Average Mean 3.9124


Findings from the study reveal that majority of the respondents to a great extent

agreed with; My supervisors continuously assess my work progress (4.7526), my

performance is evaluated quarterly, semi-annually and annually based on performance

indicators (3.8866), and there is discussion between my supervisor and myself during

performance assessment (3.7423). However, the respondents agreed to a moderate

extent that their performance was rated (3.2680). Therefore, the findings suggest that

the organization conducted performance assessment.

4.4.5 Rewarding of Performance

The researcher wanted to know to what extent the respondents agreed with the listed

aspects. Results are in table 4.4.5.

Table 4.4.5: Rewarding Performance

Mean Std.

Deviation

The rewards offered motivates me to work hard and enhances my

productivity 4.8660 .34244

The performance is linked to employee reward and compensation 4.4948 .72347

My organization has a framework to reward excellent performance

and/or salary increase decisions 3.5052 .83071

Organization compensation policy attracts and retains employees 3.4639 .81729

Average Mean 4.0825


37

Study findings show that majority of the respondents to a great extent agreed witht;

the rewards offered motivates me to work hard and enhances my productivity

(4.8660), the performance is linked to employee reward and compensation (4.4948),

and my organization has a framework to reward excellent performance and/or salary

increase decisions (3.5052). However, the respondents agreed to a moderate extent

that the organization compensation policy attracts and retains employees (3.4639).

Therefore, the study suggests that the organization adopted rewarding of performance.

4.5. Employee Motivation

The researcher wanted to find out the effect of performance appraisal on employee

motivation at the MinistryThe five-point Likert scale was also used. The table below

presents the results.

Table 4.5.1 Employee Motivation

Mean Std.

Deviation

Career planning and development 4.8430 .14850

Reward systems 4.0876 .50523

Organization culture 3.9938 .56602

Management and leadership style 3.8639 .62085

Learning and development 3.7108 .55280

Average Mean 4.0998


Research findings show that all the respondents agreed to a great extent with all the

aspects of employee motivation. Career planning and development (4.8430), reward

systems (4.0876), organization culture (3.9938), management and leadership

style (3.8639), and learning and development (3.7108). All these aspects were tested

to gauge the extent of employee motivation within the organization.

38

4.6 Effect of Performance Appraisal on Employee Motivation

The study was geared towards establishing the effect of performance appraisal on

employee motivation at the Ministry. Inferential statistics was done on the variables.

Linear regressions were done to obtain the r coefficient and r-square that determined

the relationship. The results below present a summary of the results.

4.6.1 Linear Regression Model

In establishing the effect of performance appraisal on employee motivation at the

Ministry, the study conducted a linear regression analysis. Table 4..6.1 shows results.

Table 4.6.1: Linear Regression Analysis

Model Summary

Model R R Square Adjusted R

Square

Std. Error of

the Estimate

1 .864a .841 .810 .18996

a. Predictors: (Constant), Rewarding of Performance,

Performance monitoring, Performance planning,

Performance assessment, Managing and reviewing

performance

Coefficient of determination shows the degree to which changes in the dependent

variable (employee motivation) can be explained by the change in the independent

variables or the percentage of variation in the dependent variable that is explained by

the five independent variables (Rewarding of Performance, Performance monitoring,

Performance planning, Performance assessment, Managing and reviewing

performance). The five independent variables that were studied, explain 84.1% of the

changes in the employee motivation at the Ministry as represented by the R2. The

study establishes strong positive correlation (.864) between and employee motivation

and performance appraisal.

39

Table 4.6.2 Anova

ANOVAa

Model Sum of

Squares

df Mean

Square

F Sig.

1

Regression 6.031 5 1.206 14.347 .000b

Residual 7.651 91 .084

Total 13.682 96

a. Dependent Variable: Employee Motivation

b. Predictors: (Constant), Rewarding of Performance, Performance monitoring,

Performance planning, Performance assessment, Managing and reviewing

performance

The probability value of significance 0.000 showed significant performance appraisal

affected employee motivation. If any hypothesis was tested under this study, the null

hypothesis would have been rejected and alternative picked as shown by the p-value

which is less than 0.05.

Table 4.6.3 Coefficients of Determination

Coefficientsa

Model Unstandardized

Coefficients

Standardi

zed

Coefficie

nts

t Sig. 95.0% Confidence

Interval for B

B Std.

Error

Beta Lower

Bound

Upper

Bound

(Constant) .817 .557 1.467 .146 -.289 1.923

Performance

planning -.083 .072 -.245 -1.153 .252 -.227 .060

Managing and

reviewing

performance

.201 .154 .442 1.306 .195 -.105 .506

Performance

monitoring .535 .159 .702 3.371 .001 .220 .851

Performance

assessment -.425 .138 -.950 -3.072 .003 -.700 -.150

Rewarding of

Performance .512 .132 .751 3.884 .000 .250 .773

a. Dependent Variable: Employee Motivation

40

The researcher performed a regression analysis to determine the relationship between

performance appraisal and employee motivation at EAC. The regression equation

was:

In the equation, when all factors are held constant at zero, the employee motivation is

0.817%. The data analysis also showed that when you hold all independent variables

at zero, a unit increase in performance planning will lead to a -.083 decrease in

employee motivation at the Ministry. A unit increase in the managing and reviewing

performance will lead to a .201 increase in employee motivation the Ministry. Also, a

unit increase in performance monitoring will lead to a .535 increase in employee

motivation at the Ministry. A unit increase in performance assessment will lead to a -

.425 decrease in employee motivation at EAC. Again, a unit increase in rewarding of

performance will lead to a .512 increase in employee performance at the Ministry.

The study showed relationship of performance monitoring, performance assessment

and rewarding of performance and employee motivation at Ministry since their p-

values are less than 0.05 (.001, .003, & .000). Again, we find that performance

planning and managing and reviewing performance had an insignificant relationship

with employee motivation since their p-values (.252 & .195) is greater that (0.05)

therefore we accept any null hypothesis set. Therefore, we can deduce that

41

performance appraisal system has a major impact on the employee motivation at the

Ministry.

4.7 Discussions of the Findings

The study aimed at establishing the effect of performance appraisal on employee

motivation at the Ministry of East African Community, Labour and Social Protection.

Findings and results were found to be in line with the literature review. The results

has indicated that performance appraisal provides greater objectivity and fairness in

making judgements and decisions about the employees in the organization as stated

by Williams (2002) who feels that appraisal of performance concerns creating

conditions where employees share organization goals and help to people to

understand their input to those goals. The respondents have shown from the findings

regularizing the procedures in evaluating and updating information about performance

appraisal to subordinates was key in its successful implementation as pointed out by

Torrington et.al (2013) who asserts that maintaining performance management

performance appraisal must be entailed and supported by entire management in

realizing organizational competitive edge.

The study also established that uniformity and fairness is required conducting

performance appraisal as this provides equality as argued in the literature by Kandula

(2007). Performance assessment provided a rationale for various employee decisions.

The findings also reveal that performance monitoring ensures that no employees’

talents, abilities and potentials are overlooked.

On motivation the findings also demonstrate that employee motivation is a driving

force that motivates an employee in job. As stated in the literature by Newstrom

(2011) Motivation has a positive impact on employees’ performance when employees

42

feel low or dissatisfied it’s the role of the supervisor to motivate them. Training also

has a positive impact on performance of employees. From this survey public sector

institutions need to make necessary steps to increase the performance of employees.

The outcome of the study shows that leadership is necessary in providing direction on

employee appraisal. Robbins and Judge (2013) state that order and consistency is

brought about by good management by coming up with plans, organizational

structures, and results monitoring in relation to the plans. Management is tasked with

ensuring have the required skills for engagement through proper coaching, providing

leadership and motivation, and appraising the employees who would in turn perform

with efficiency and effectiveness.

43

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction

Key findings, conclusion and recommendations of the study are made here. It also

includes the limitations encountered and suggestions for future studies.

5.2 Summary of the Findings

The researcher wanted to know the effect of performance appraisal on employee

motivation at the Ministry. Inferential statistics was done on the variables. Linear

regressions were done to obtain the r coefficient and r-square that determined the

relationship. The findings of the study shows that Coefficient of determination

explains the level in which changes in the dependent variable can be explained by the

change in the independent variables or the percentage of variation in the dependent

variable that is explained by the five independent variables (Rewarding of

performance, performance monitoring, planning of performance, performance

measurement, performance managing and reviewing). The independent variable

explained the changes in the employee motivation at the Ministry as represented by

the R2. The study showed that there was a strong positive significant correlation

between performance appraisal and employee motivation. The study shows that

significant correlation between performance monitoring, performance assessment and

rewarding of performance and employee motivation at Ministry since their p-values

are less than 0.05. The study shows that performance planning and managing and

reviewing performance had an insignificant relationship with employee motivation

since their p-values is greater that therefore we accept any null hypothesis set.

Therefore, we can deduce that performance appraisal system has a significant impact

on the employee motivation at the Ministry.

44

5.4 Conclusion

From the findings and discussion the Ministry had adopted performance appraisal as a

means of motivating employees. A comprehensive performance appraisal policy

needs to be established in order to link pay to performance since the current policy

has room in dealing with underperformers. In order to manage poor performance

feedback id required throughout the appraisal period and there is need to look into

what employees need to overcome problems in performance; and of more importance

how the management can help and support the employees and the organization at

large.

The study also established that performance appraisal system provides employees

with self-rating, and performance standards. Effective performance system provides

behavioral standards. During performance planning processes both behavioral and

results outcomes should have been seen so as to ensure an ongoing feedback in the

performance appraisal process.

5.5 Recommendations

5.5.1 Effective Feedback and Communication on Performance Appraisal

Effective feedback and communication was essential when conducting performance

appraisal process. The findings of the study highlight ways of improving performance

appraisal, communication and feedback ensures that employees being assessed are

given information about their performance. Communication that lacks clarity and

focus doesn’t discussion of staff performance this leads to problems in motivation in

places of work. For prevention of performance related issues, managers have to

communicate vision, mission and objectives of the organization to ensure employees

understand their performance goals. Highly effective communication process should

allow one on one discussion of staff performance appraisal issues. The Ministry

45

should give employees opportunity for responding and asking questions that help

them improve performance and ensure employees are motivated by appreciating their

opinions.

5.5.2 Training of Employees on Performance Appraisal

Majority of the respondents indicated that they have lack training opportunities

especially the ones on performance appraisal system. Training is key indegriedient as

it enables employees to acquire relevant skills. It also enables one to be conversant

with current challenges in one’s line of duty. Respondents indicated that training was

important as its purpose was to improve morale. Skills will be expanded through

training where staff responsibilities can be enhanced and they rely less on

management in decision making. Specific skills related to performance appraisal do

not necessarily limit work related flexibility. Staffs who received such targeted

training always improve on setting of annual targets, drawing of individual work

plans, communication skills, professionalism, conscientiousness and creativity and

innovation.

5.3.3 Employees Participation on Performance Appraisal Process

Participation of employees in performance appraisal process has resulted in successful

value creation in many organizations. Participation yields changes in behavior. The

probability of high performance of employees involved in appraisal process increases

due to awareness and information and when convinced that the performance appraisal

is necessary. More involvement of employees in designing of appraisal tools will

make them feel they are a part of the organization that has been implemented.

Performance appraisal system will not be resisted if the employees feel that they are a

part of it also involvement and participation will ensure employee motivation and

commitment in the organization.

46

Performance should be aligned to better reward and compensation. The management

must consistently motivate the employees and supervisors during performance

evaluation. This ensures that the rapport and agreement during performance appraisal

exercise. The standards set for performance appraisal are realistic, achievable,

measurable and consistent with the organizational goals.

5.6 Suggestion for Future Research

The future research study should target at least three larger Government ministries

and a different research design should be used to establish the effect and relationship

of performance appraisal with other variables such as employee engagement,

employee commitment and morale. Future studies should have a larger sample size

compared with this research study.

5.7 Study Limitations

This research encountered the challenge of financial constrain which limited the

research to a small sample size. There was a problem in data collection as some

respondents failed return the questionnaires since they believed that the information

they would have provided would have been used against them and this delayed data

analysis.

47

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APPENDICES

APPENDIX I: QUESTIONNAIRE

INSTRUCTIONS: Please put “X” in the appropriate box.

SECTION A: BACKGROUND INFORMATION OF THE RESPONDENTS

1. What is your gender?

1.1 Female

1.2 Male

2. Please give your age bracket?

2.1 18 to 25

2.2 26 to 35

2.3 36 to 45

2.4 46 and above

3. What is your highest educational level?

3.1 PHD

3.2 Masters Degree

3.3 Bachelors Degree

3.4 Higher Diploma

3.5 Diploma

3.6 Certificate

4. State your work experience?

4.1 0 to 10 years

4.2 10 to 20 years

4.3 20 years and above

5. Indicate your job category?

5.1 Senior management

(P and above)

5.2 Middle level (J to N)

5.3 Lower level (A to H)

6. State your Department of Work?

51

6.1 Department of Labour

6.2 Department of Social Protection

6.3 National Employment Bureau

6.4 Productivity Centre of Kenya

6.5 Department of National Human Resource

Planning and Development

SECTION B: PERFORMANCE APPRAISAL SYSTEM

Please indicate the extent to which you feel that the indicated statements apply to you by

putting an “X “in the appropriate block.

(5). Strongly Agree (4). Agree (3). Neither Agree nor Disagree (2). Disagree (1)

Strongly Disagree

B1 Performance Planning

Strongly

Agree

Agree Neither

Agree

nor

Disagree

Disagree Strongly

Disagree

1 My organization set clear

objectives and I work

towards their achievement

2 I adhere to realistic work

plans and time tables

established by my

supervisor, department and

organization

3 I improve the quality of

work through better

planning, on-going

discussions and fair

participatory appraisal

4 My performance

expectations is usually

defined in my individual

work plan and job

description

5 The ministry involves

employees in planning for

performance

52

B

2

Managing and Reviewing

Performance

Strongly

Agree

Agree Neither

Agree

nor

Disagree

Disagree Strongly

Disagree

1 My performance

achievements is balanced

with performance

objectives

2 My behaviour in the job

affects my performance

3 My supervisor holds a

performance review

meeting to discuss my

performance

4 I am provided with

feedback based on factual

evidence on my

performance

5

B3 Performance Monitoring Strongly

Agree

Agree Neither

Agree

nor

Disagree

Disagree Strongly

Disagree

1 My individual performance

has link with

organizational

performance

2 There is feedback on my

performance as an

employee

3 Progress reviews are

conducted to compare the

predetermined standards of

employees

4 My work plan is reviewed

during monitoring process

5 I have the right tools to

help me achieve my work

goals

53

6 My work environment is

friendly and helps me work

effectively

B4 Performance Assessment Strongly

Agree

Agree Neither

Agree

nor

Disagree

Disagree Strongly

Disagree

1 My supervisors

continuously assess my

work progress

2 My performance is

evaluated quarterly, semi-

annually and annually

based on performance

indicators

3 Performance is rated

4. There is discussion

between my supervisor and

myself during performance

assessment

B 5 Rewarding of

Performance

Strongly

Agree

Agree Neither

Agree

nor

Disagree

Disagree Strongly

Disagree

1 My organization has a

framework to reward

excellent performance

and/or salary increase

decisions

2 Organization

compensation policy

attracts and retains

employees

3 The performance is linked

to employee reward and

compensation

4. The rewards offered

motivates me to work hard

and enhances my

productivity

54

SECTION C: EMPLOYEE MOTIVATION

Please indicate the extent to which you feel that the indicated statements apply to you by

putting an “X “in the appropriate block.

(5). Strongly Agree (4). Agree (3). Neither Agree nor Disagree (2). Disagree (1). Strongly

Disagree

B1 Organization Culture

Strongly

Agree

Agree Neither

Agree

nor

Disagree

Disagree Strongly

Disagree

1 My organization values

and beliefs support

achievement of business

goals

2 The organization culture

help attract and retain the

high quality people in my

ministry

3 Our organization culture

ensures efficiency and

effectiveness of activities

in accordance with

organization stated targets

and strategic plan

4 My ministry culture and

structure indicates areas of

responsibility, authority

and accountability

5 There is cohesive among

employees and senior

managers

B

2

Management and

Leadership Style

Strongly

Agree

Agree Neither

agree

nor

Disagree

Disagree Strongly

Disagree

1 Managers give employees

recognition for a job well

done and motivates by

reward

55

2 Supervisors delegate

powers and responsibilities

to us that helps in decision

making

3 I am consulted by my

supervisor on most issues

related to work

4 My supervisor provides me

with opportunity to show

case my leadership skills

by acting in higher

positions

5 My supervisor has

confidence, trust in

subordinates

B3 Learning and

Development

Strongly

Agree

Agree Neither

Agree

nor

Disagree

Disagree Strongly

Disagree

1 I have received training

within the last one year

2 The training impacted on

my motivation to perform

3 I consider training is one

of the conditions for

performance appraisal in

my department

4 I am satisfied with the

usefulness of learning

inputs in improving my

performance

5 My performance gaps are

identified for appropriate

training programme

6 I am satisfied with the

usefulness of learning

inputs in improving my

performance

56

B4 Career Planning and

Development

Strongly

Agree

Agree Neither

Agree

nor

Disagree

Disagree Strongly

Disagree

1 The organization supports

my development and

career aspirations

2 My supervisor coaches and

mentors me to raise my

level of competence

3 I continuously seek to

develop myself

professionally

4. I am involved and

consulted in career

planning and development

by my supervisors

B 5 Reward Systems Strongly

Agree

Agree Neither

Agree

nor

Disagree

Disagree Strongly

Disagree

1 Performance is linked to

rewards

2 Rewards are awarded

fairly

3 The rewards in my

organization are in form of

promotion, certificate of

merit, leadership

responsibilities and

monetary rewards

4. Rewards are based on

individual employees

effect of performance appraisal on employee motivation at

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